China Demand Fuels U.S. Farm Economy, as Federal Support Subsides
Keith Good, Farm Policy News
University of Illinois - June 7, 2021
Financial Times writer Aime Williams reported on Monday that, “Donald Trump’s trade war with China left American farmers dependent on government handouts to survive. But China is now at the heart of a reversal in farmers’ fortunes, as booming exports and soaring food prices fuel a recovery in the US agricultural economy.
“The US is on course to ship a record $37.2bn worth of farm goods to China this year, led by sales of soyabeans, corn, tree nuts, beef, wheat and poultry, the US Department of Agriculture has forecast. The sum is 23 per cent of total US agricultural exports estimated at $164bn.
“Increased demand from China, along with a supply constraints on corn and soyabeans caused by a drought in Brazil, have driven a surge in global food prices, providing a further boost for American farmers.”
The FT article stated that, “American farmers received unprecedented government subsidies after China hit back at Trump’s tariffs with punitive levies on US farm goods in 2018. A hoped-for reprieve in early 2020, when Beijing pledged massive agricultural purchases under a trade deal with the US, quickly vanished as the pandemic spread and led Washington to deliver more aid.”
“Corn and soyabean prices this spring neared all-time highs reached when a brutal drought in the summer of 2012 devastated US production. While the growing season is early, forecasters this year expect healthy crops, enabling farmers to take advantage of soyabeans selling for more than $15 a bushel and corn above $6 a bushel,” the FT article said.
The FT article indicated that,
Whether the sales would continue was ‘the $64,000 question that everyone wants to know the answer to,’ said Scott Irwin, an agricultural economist at the University of Illinois. But he added: ‘I don’t see any reason that China’s buying is going to alter substantially, at least on a global scale.’
Meanwhile, Reuters News reported this week that, “China’s soybean imports rose in May from the previous month, customs data showed on Monday, as more cargoes from top supplier Brazil cleared customs.
“China, the world’s top importer of soybeans, brought in 9.61 million tonnes of the oilseed in May, up 29% from 7.45 million tonnes in April, when some Brazilian shipments were delayed, data from the General Administration of Customs showed...
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